The Climate and Resiliency (EX) Task Force is organized around five workstreams. The workstreams are broken out by tab below to showcase the activities and topics covered under each group.
Upcoming Member Events
October 6 (virtual) Washington Office of the Insurance Commissioner Climate Summit 2021 recording available here: https://www.youtube.com/watch?v=yPrO7XkzgvM&t=0s
October 13 & 14 (virtual) Connecticut Insurance Department Conference on Climate Change and Insurance Details and Registration Link here: https://portal.ct.gov/CIDClimateConference?language=en_US
The Pre-Disaster Mitigation Workstream, led by Commissioner Mark Afable (WI), serves to accomplish the following:
- Participate in multi-agency/stakeholder educational efforts on coverage gaps and pre-disaster mitigation related to climate risks.
- Incentivize insurer recognition of enhanced building codes in underwriting and rating.
- Continue consumer education and awareness on coverage gap and pre-disaster mitigation related to climate risks and natural catastrophe exposure, including possible strategic partnerships.
During the Pre-Disaster Mitigation Workstream meeting held on May 12, the goals of the Workstream were discussed. The first goal is to identify mitigation actions that reduce loss from common perils. A list of mitigation measures was exposed for comment on August 12.
The next goal is to gather input on wind mitigation factors and identify measures that contribute to the availability and affordability of insurance coverage. The Workstream agreed to focus on wind first, as a leading loss driver across much of the country.
MEETING RECORDINGS
The Workstream co-hosted a building code and mitigation workshop on March 17, 18 and 19 in conjunction with CIPR and the Federal Alliance for Safe Homes (FLASH).
The slides and recorded sessions are available here:
Day One: Focus on Building Codes
Slides | Recording
RESOURCES
Center for Insurance Policy & Research State Resiliency Map - this page provides links to resources within each State Department of Insurance including disaster risk management and peril-specific information.
NAIC and Federal Resources on Resiliency, Disaster Preparedness and Response - this page provides links to pertinent information created by the NAIC as well as Federal Agencies.
International Code Council (ICC)
ICC develops model standards for building codes. They provide a family of codes for various uses including, not limited to, building (IBC), residential (IRC), energy, and Wildland Urban Interface Code (WUI). To learn more about the family of codes or the 3 year development lifecycle visit: https://www.iccsafe.org/products-and-services/i-codes/the-i-codes/.
To learn more about the codes in your state visit: https://codeadoptions.iccsafe.org/.
Federal Emergency Management Agency (FEMA)
"Building Codes Save: A Nationwide Study of Loss Prevention," November 2020. The study shows that modern building codes lead to major reduction in property losses from natural disasters.
| Findings of Modeled I-Code Savings | Number of Post-200 Structures | Money Saved, annual average |
| Floods | 786k | $484 million |
| Earthquakes | 2.4m | $60 million |
| Hurricane Winds | 9.2m | $1.1 billion |
https://www.fema.gov/emergency-managers/risk-management/building-scienc…
National Institute of Building Sciences (NIBS)
NIBS Mitigation Saves: 2019 Report. Report findings show:
Adopting model codes save $11 per $1 spent.
Exceeding codes save $4 per $1 spent.http://2021.nibs.org/files/pdfs/NIBS_MMC_MitigationSaves_2019.pdf
Consumer Information
A took for consumers to lookup the building codes used in their location:
www.Inspect2Protect.org
Industry Information
ISO National Building Code Assessment Report, Building Code Effectiveness Grading Schedule (2019 Edition). Through the BCEGS program, ISO assesses the building codes in effect in individual communities and how those communities enforce their building codes.
https://www.isomitigation.com/siteassets/downloads/iso-bcegs-state-repo…
FEMA Hazard Mitigation Assistance Division 2020 Year in Review, 2020.
The report provides a list of federal funding programs, tools and resources and success stories for the programs use in 2020.
https://www.fema.gov/sites/default/files/documents/fema_hma-2020-year-i…
FEMA Mitigation Planning Success Stories
https://fema.maps.arcgis.com/apps/Shortlist/index.html?appid=d50f03a118…
National Institute of Building Sciences (NIBS)
NIBS Mitigation Saves: 2019 Report. Report findings show:
Federal mitigation grants save $6 per $1 spent.
Private sector building retrofit saves $4 per $1 spent.
Mitigating infrastructure saves $4 per $1 spent.
https://cdn.ymaws.com/www.nibs.org/resource/resmgr/reports/mitigation_s…
National Institute of Building Sciences (NIBS)
A Roadmap to Resilience, August 2020. The report spells out concrete incentives that reduce owner costs to make new and existing infrastructure more disaster resilient. Incentives include mortgage discounts, insurance premium discounts, tax incentives, grants, and other inducements. This roadmap was developed by the Multi-Hazard Mitigation Council of the National Institute of Building Sciences.
https://www.nibs.org/reports/roadmap-resilience-incentivization
State Regulator Policy Avenues and Resiliency Playbook (NAIC)
Provides research and a framework for funding resiliency through grants and incentives. Includes a list of state actions regarding resiliency programs, insurance rate reduction and premium discounts.
https://content.naic.org/sites/default/files/inline-files/Resiliency%20…
Consumer Information
Community Resilience Planning
https://www.nist.gov/community-resilience
Protect your home checklist
https://flash.org/protect.php
IBHS Preparedness Tips to Protect Homes and Businesses from Many Perils
https://disastersafety.org/
NAIC Consumer Resources
https://content.naic.org/consumer.htm
The Solvency Workstream, led by Commissioner Kathleen Birrane (MD), serves to accomplish the following:
- Recommend enhancements to regulator solvency tools, including a risk framework for addressing wildfires and flood within the property/casualty (P/C) risk-based capital (RBC) formula, modifications to the Own Risk and Solvency Assessment (ORSA), the Financial Analysis Handbook and the Financial Condition Examiners Handbook. Develop climate risk stress tests and scenario analysis to evaluate potential financial exposure to both the physical and transition impacts of climate change. Provide scenarios, assumptions, and parameters for the stress testing exercise.
- Determine methodology for quantifying insurers' exposure to climate-related investments.
MEETING RECORDINGS
No Recording at this Time.
RESOURCES
IAIS 2021 Global Insurance Market Report (GIMAR) Special edition on climate risk.
The Climate Risk Disclosure Workstream, led by Commissioner Andrew Stolfi (OR), serves to accomplish the following:
- Consider modifications to the Climate Risk Disclosure to align with Task Force on Climate-related Financial Disclosures (TCFD) and promote uniformity in reporting requirements.
NOTICES:
The Climate Risk Disclosure Workstream of the Climate and Resiliency (EX) Task Force requested comments on its guiding questions to determine objectives of NAIC Climate Risk Disclosures. Responses received by comment letter and a compilation of all responses received are below:
MEETING RECORDINGS
The workstream met to 1) hear the history and administration/collection process of the NAIC Climate Risk Disclosure Survey, 2) hear a presentation regarding the CIPR's report Assessing NAIC climate risk disclosure data, and 3) hear a presentation regarding phase 1 of the American Academy of Actuary's research on the NAIC Climate Risk Disclosure Survey.
Webex Recording: Climate Disclosure Work Stream-20210127
Materials
The workstream met to 1) hear a presentation from Principles for Responsible Investment's climate reporting framework, and 2) hear a presentation on the CDP's Climate Disclosures and Related Analytics.
Webex Recording: Climate Disclosure Work Stream-20210203
Materials
The workstream met to 1) hear a presentation from CERES regarding climate risk disclosure insurance recommendations, 2) hear a presentation on Zurich's climate risk disclosure process and preference, and 3) hear a presentation on AIG's climate risk disclosure process and preference.
Webex Recording: Climate Disclosure Work Stream-20210217
Materials
The workstream met to 1) hear a presentation from RBC Global Asset Management Inc. regarding use of climate disclosures, 2) hear a presentation from Sustainalytics regarding their perspective of the information received through the NAIC Climate Risk Disclosure Survey, and 3) discuss questions being contemplated by the workstream to inform their future recommendations to the Task Force. Unable to share webex recording due to presenter legal constraints.
Materials
RESOURCES
The Innovation Workstream, led by Commissioner Colin Hayashida (HI), serves to accomplish the following:
- Discuss the use of innovative insurance products that respond to climate-related risks.
MEETING RECORDINGS
October 6, 2021 Innovation Workstream Meeting
Presentation from Guy Carpenter regarding community-based insurance.
September 9, 2021 Innovation Workstream Meeting
Presentation from Sola Insurance regarding tornado endorsement coverage.
July 21, 2021 Innovation Workstream Meeting
Presentations from Bermuda Monetary Authority (BMA), Nephila Capital and Renaissance Re
June 3, 2021 Innovation Workstream Meeting
Presentation from Global Parametrics (GP)
JerrySkees_LegalConsiderationsPaper.pdf
May 10 Innovation Workstream Meeting
Presentation from First Company of Hawaii (FICOH)
March 25 Innovation Workstream Meeting
Presentation from Professional Solutions Insurance Company
RESOURCES
The CIPR has a key issue page on parametric disaster insurance which includes a history of the product, it's use insuring against natural disasters, a summary of the benefits and concerns as well as links to several scholarly articles.
https://content.naic.org/cipr_topics/topic_parametric_disaster_insuranc…
The A2ii is the implementation arm of the International Association of Insurance Supervisors (IAIS) on Inclusive Insurance generating and disseminating knowledge, building capacity, contributing to IAIS standard-setting, they foster learning and dialogue, support implementation at the regional and national levels, and participate in global advocacy processes. A2ii has developed several reports and issues papers on parametric/index-based insurance which can be found here: https://www.a2ii.org/en/knowledge-center/index-insurance.
March 25, A2ii hosted a webinar regarding index-based insurance. The webinar reviews the results of a survey conducted by A2ii collecting information from supervisors and other stakeholders on the current state of index insurance. The webinar can be viewed here: https://www.youtube.com/watch?v=04HSYqJKWgU
The report including survey results can be found here: https://a2ii.org/en/knowledge-center/....
The Office of the Commissioner of Insurance of Puerto Rico adopted Rule Number 103, entitled "Requirements for Submitting and Processing Parametric Catastrophic Microinsurance in Personal Lines."
http://ocs.gobierno.pr/enocspr/files/Regla%20103_9185%20(English).pdf&n…;
This Rule is adopted for the purpose of establishing the regulatory scheme for microinsurance products that are directed at providing coverage for catastrophic risk in personal lines to foster access for all economic sectors in Puerto Rico to insurance coverage with low-cost premiums. This Rule is intended to provide a financial protection tool for persons who otherwise could not purchase traditional insurance. The primary purpose of microinsurance is to create an inclusive financial protection system that will encourage the development of private insurance products that are accessible to the low-income population.
The Technology Workstream, led by Commissioner James Donelon (LA), serves to accomplish the following:
- Apply technology, such as early warning systems and predictive modeling tools, to understand and evaluate climate risk exposures.
The Technology Workstream ushered a proposal for the NAIC/CIPR to create a Catastrophe Modeling Center of Excellence (COE). The Technology Workstream worked with the Solvency Workstream and the Pre-Disaster Mitigation Workstream in support of this initiative. If adopted, the role of the COE would be to 1) facilitate insurance department access to catastrophe modeling documentation and assistance distilling the information, 2) provide general technical education/training materials on the mechanics of commercial models and treatment of perils and risk exposures, and 3) conduct applied research analysis utilizing various model platforms to proactively answer the regulatory “so what” questions that may need to be addressed for regulatory resilience priorities. It is important to note that the support services offered through the COE will not take the place of individual state department of insurance activities involving CAT models such as model and rate filing review, nor would the COE approve vendor models.
The proposal (attached here) is exposed for public comment. Following a 30 day comment period, the Workstreams will conduct a meeting in early November to review comments received. Please send comments to jgardner@naic.org no later than Thursday, October 21st.
MEETING RECORDINGS
No Recording at This Time.